To build a screener for "Rigid Risers" on Screener.in, focusing on companies that are growing without issuing any new capital, we need to define criteria that will identify companies that are expanding through internal resources, improving profitability, and not diluting shareholder value. Here's a step-by-step guide to setting up this screener:
1. Define the Criteria
No New Equity Issuance: Companies should have no significant increase in the number of shares outstanding over a defined period.
Consistent Earnings Growth: Companies should show consistent growth in earnings over the past few years.
ROE (Return on Equity): A high ROE suggests the company is efficiently using shareholders' funds to generate profits.
Low or Zero Debt: Companies should ideally have low or no debt to ensure they are not funding growth through borrowing.
Positive Free Cash Flow (FCF): Consistent positive FCF indicates that the company generates more cash than it needs to maintain or expand its operations.
Dividend Payout: A consistent or increasing dividend payout could be an additional sign of strong financial health.
Operating Profit Margin: Consistently high operating profit margins indicate the company's ability to maintain profitability.
2. Set Up the Screener on Screener.in
Number of Shares:
Use a filter to check if the number of shares has remained relatively constant over the last 5 years.
Formula: Current Shares Outstanding / Shares Outstanding 5 Years Ago < 1.05
Earnings Growth:
Use a filter for EPS growth.
Formula: 5Years EPS Growth > 10%
ROE:
Set a minimum threshold for ROE.
Formula: ROE > 15%
Debt to Equity Ratio:
Ensure low leverage.
Formula: Debt to Equity < 0.5
Free Cash Flow:
Ensure positive cash flow.
Formula: Free Cash Flow > 0
Dividend Payout:
Check for dividend payouts.
Formula: Dividend Payout Ratio > 10%
Operating Profit Margin:
Consistent profitability.
Formula: Operating Profit Margin > 15%
3. Implement the Screener
Log in to Screener.in: If you don't have an account, sign up.
Create New Screener:
Go to the "Create New Screener" option.
Add Filters:
Input the criteria using the formulas above.
Save the Screener:
Name your screener "Rigid Risers" and save it for future use.
4. Analyze the Results
Check for Consistency: Review the list of companies that match the criteria.
Manual Review: It’s advisable to manually review the top candidates to ensure they align with your expectations.
This screener should help you identify companies in the Indian stock market that are growing without issuing new capital, ensuring the integrity of shareholder value while still expanding operations.